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| 1 | |
Accountants use the term "debit" to refer to |
| | A) | a firm has incurred debt |
| | B) | a reduction in amounts owed |
| | C) | events that increase accounts |
| | D) | an amount entered on the left-hand side of an account |
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| 2 | |
Which of the following statements is NOT true about permanent accounts? |
| | A) | Permanent accounts are never closed. |
| | B) | An asset is a permanent account. |
| | C) | All balance sheet accounts are permanent. |
| | D) | An expense is a permanent account. |
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| 3 | |
The entry on November 1, 2010 to record the payment with cash of rent for a full year would include a: |
| | A) | debit to rent expense |
| | B) | debit to prepaid rent |
| | C) | credit to prepaid rent |
| | D) | credit to accounts payable |
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| 4 | |
The purpose of a trial balance is to: |
| | A) | insure that correct accounts have been debited and credited |
| | B) | check to see if the total debits equal the total credits |
| | C) | check to determine whether all journal entries were made |
| | D) | all of the above are correct |
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| 5 | |
On November 4, 2010, Pauley & James, Chartered paid $12,000 for two years rent in advance. Assuming that Pauley & James's fiscal year ends on December 31, 2010, what would be the required adjusting entry: |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/ch07_q5opa.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (6.0K)</a>]]> |
| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/ch07_q5opb.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (7.0K)</a>]]> |
| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/ch07_q5opc.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (6.0K)</a>]]> |
| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/ch07_q5opd.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>]]> |
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| 6 | |
The most likely explanation for the following journal entry would be:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/ch07_q6.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (5.0K)</a>]]>
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| | A) | performed a service and immediately received the cash |
| | B) | performed a service and billed the customer |
| | C) | performed a service for a customer who had paid for the service ahead of time |
| | D) | recorded the receipt of cash from a customer for services previously performed |
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| 7 | |
The following journal entry
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/image001.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (4.0K)</a>]]>
affected the accounting equation by: |
| | A) | increasing assets and increasing liabilities |
| | B) | decreasing liabilities and increasing owners' equity |
| | C) | increasing assets and increasing owners' equity |
| | D) | decreasing assets and decreasing owners' equity |
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| 8 | |
The 7th of 8 steps in the accounting cycle is to prepare: |
| | A) | the post-closing trial balance |
| | B) | adjusting entries |
| | C) | financial statements |
| | D) | make and post closing entries |
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| 9 | |
Harry's Hideaway has one expense account, insurance expense, which is to be closed out at year end. The closing entry would be: |
| | A) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/ch07_q9opa.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (7.0K)</a>]]> |
| | B) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/ch07_q9opb.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (7.0K)</a>]]> |
| | C) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/ch07_q9opc.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (7.0K)</a>]]> |
| | D) |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0078136601/794876/ch07_q9opd.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (8.0K)</a>]]> |
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| 10 | |
The statement of retained earnings describes all of the following except: |
| | A) | Dividends |
| | B) | Net income |
| | C) | Beginning balance of retained earnings |
| | D) | Cash generated by operations |
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| 11 | |
If the year-end depreciation adjustment was too big which of the following would not be true? |
| | A) | assets and owners' equity would be understated |
| | B) | liabilities would be overstated and owners' equity would be understated |
| | C) | assets and net income would be understated |
| | D) | net income and owners' equity would be understated |
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| 12 | |
Which of the following appears on both the statement of cash flows and the balance sheet? |
| | A) | Cash balance at the end of the year |
| | B) | Net income |
| | C) | Retained earnings |
| | D) | Accounts payable |
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| 13 | |
Which of the following results in a revenue event? |
| | A) | Stock is issued for cash |
| | B) | A telephone bill is received but not paid |
| | C) | A customer pays for merchandise purchased earlier |
| | D) | A customer buys merchandise on account. |
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| 14 | |
Net income would increase as a result of which of the following adjustments? |
| | A) | Adjusting unearned revenue |
| | B) | Accruing an expense |
| | C) | Recording depreciation |
| | D) | Adjusting Prepaid Rent |
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| 15 | |
In a computer-based transaction system which of the following serves as the ledger? |
| | A) | Master file |
| | B) | Transaction file |
| | C) | Accumulation file |
| | D) | Data file |
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